International finance and development: opportunity or threat?

The volume of assets traded on international financial markets has reached gigantic proportions. The question must arise, then, as to whether international finance might play a decisive role in the provision of stable resources in the quantities needed to fund development. This article analyses the function that international finance might perform and that it actually has performed, focusing specifically on the analysis of private capital flows, official development assistance and external borrowing. It concludes that there need to be far-reaching structural reforms in the workings of the international financial system and in development financing instruments and mechanisms if these are to be placed at the service of long-term development goals.